Performance Marketing vs Brand Marketing. Difference Explained

Usually, brand and performance marketing are both parts of the strategy. If we are talking about measurable results, such as sales, growth, clicks, and leads, it's all about performance marketing, and some suggest that brand marketing isn't worth investing in. But is it? Let's take a look at the companies that have been successful for years and even decades - they spent millions and even billions on brand awareness, and the customers can recognize the company's product by a few musical notes from a TV ad or by a small logo on a billboard.

Brand vs performance marketing is not a competition; it's a powerful union, and only those marketers who find the perfect balance can succeed.

What is Performance Marketing

When advertisers talk about performance marketing, they usually mean driving immediate actions like sales, clicks, or conversions. Performance campaigns are mostly short-term and results-oriented, and marketers use different metrics to measure campaign results.

Key Performance Metrics

Cost Per Click (CPC)

• Measures the cost of each ad click.
• Formula: CPC = Total Advertising Cost ÷ Total Number of Clicks.
• Importance: Helps control and optimize ad spending by ensuring more clicks for the same budget.

Click-Through Rate (CTR)

• Measures the percentage of users who click on an ad after seeing it.
• Formula: CTR = (Total Clicks ÷ Total Impressions) × 100.
• Importance: Indicates ad effectiveness and relevance to the target audience.

Cost Per Acquisition (CPA)

• Measures the cost of acquiring a customer or lead.
• Formula: CPA = Total Advertising Cost ÷ Total Number of Acquisitions.
• Importance: Shows campaign efficiency in converting users into customers.

Return on Ad Spend (ROAS)

• Measures revenue generated per dollar spent on advertising.
• Formula: ROAS = Revenue Generated from Ads ÷ Advertising Cost.
• Importance: Evaluates campaign profitability and helps allocate budgets effectively.

Conversion Rate

• Measures the percentage of users who complete a desired action.
• Formula: Conversion Rate = (Total Conversions ÷ Total Visitors) × 100.
• Importance: Reflects campaign effectiveness in turning visitors into customers.

Customer Lifetime Value (CLV)

• Measures the total value of a customer over their lifetime.
• Importance: Helps understand long-term profitability from customer acquisition efforts.

Cost Per Impression (CPI)/Cost Per Mille (CPM)

• Measures the cost of each ad impression.
• Formula:
• CPI = Total Ad Cost / Total Impressions
• CPM = (Total Ad Cost / Total Impressions) × 1000.
• Importance: Useful for high-funnel campaigns focused on brand awareness.

Cost Per Lead (CPL)

• Measures the cost of generating a lead.
• Formula: CPL = Total Marketing Spend / Total Number of Leads Generated.
• Importance: Essential for campaigns focused on lead generation

Key Performance Marketing Channels

1. Search Engine Marketing (SEM) is a tool that almost all advertisers use in their marketing strategy. Paid ads on search engines like Google target specific keywords. Users see short ad messages with specific CTAs. The main benefit of SEM is that it provides highly relevant traffic and measurable ROI.
2. Social Media Marketing. Platforms like Facebook, Instagram, YouTube, and others offer almost the same ad capabilities as SEM, which targets ads based on demographics and behaviors.
3. Email Marketing can also be a performance tool. It involves direct marketing to users via email, often to those who have shown interest and left requests or provided emails to the brand. Campaigns are usually automated and personalized.
4. Streaming (CTV) advertising. TV is now also a part of performance camping and can be as representative as all other channels.

TV role in Performance Marketing

Today, streaming TV targeting capabilities are similar to those of digital platforms like Google or Meta. Advertisers can reach specific demographics, interests, and behaviors on TV, including much more than typical age and gender. Platforms like TV+ have a number of specific audiences, so advertisers can create campaigns that resonate with customers’ needs.

CTV provides measurable outcomes, enabling advertisers to track the success of their campaigns and make data-driven decisions to optimize. Main CTV metrics like CPM, unique reach, or frequency help to build a data-driven strategy.

CTV ads can have higher engagement and recall rates than other digital platforms, mostly due to their larger screen size and “sit-down effect” when a person is concentrated on what’s going on on screen. Streaming can also be integrated with other digital channels to create cohesive marketing efforts and a halo effect.

Key Advantages of CTV for Performance Marketing

• Precision Targeting.
• Measurable Outcomes.
• Enhanced User Experience.
• Global Reach and Scalability.
• Performance-Based Ad.
• Integration with Broader Marketing Strategies.

What is Brand Marketing?

Nike's "Just Do It" launched in 1988, Coca-Cola's "Holidays are Coming" and Dove's "Real Beauty" - these campaigns are iconic and great examples of how brand marketing works. These campaigns are renowned for their creativity, emotional resonance, and ability to engage global audiences. Brand marketing can indeed help reduce costs for performance marketing and shorten customer journey steps in several ways:

1. Reduced Customer Acquisition Costs (CAC). By building brand awareness, potential customers are more likely to recognize and trust the brand, making them easier to convert. This reduces the number of touchpoints needed to acquire a customer, thereby decreasing CAC.
2. Shortened Customer Journey. When customers are already familiar with a brand, they are more likely to move quickly through the sales funnel. This familiarity reduces the number of steps required in the customer journey, as customers are more inclined to trust and engage with a recognized brand.
3. Enhanced Performance Campaigns. Brand equity built through brand marketing can enhance the effectiveness of performance marketing campaigns. Recognized brands encounter less resistance from potential customers, leading to higher conversion rates and improved campaign ROI.
4. Long-Term Sustainability. While performance marketing can drive immediate results, brand marketing provides long-term sustainability by building loyalty and trust. This foundation supports ongoing performance marketing efforts by ensuring a consistent audience base.

Key Brand Marketing Metric

Brand Awareness. Measures how well consumers recognize and recall the brand. It is essential for establishing a brand presence and influencing purchase decisions. Surveys, branded search volume, direct website traffic, and social media mentions help to measure brand awareness.

Brand Sentiment. Tracking how consumers feel about the brand, often through social media and customer feedback, helps to understand consumer perception and loyalty. To measure brand sentiment, advertisers need social media analytics, customer surveys, etc.

Brand Engagement measures interactions between consumers and the brand, such as website visits, social media interactions, and purchases. Website traffic, social media engagement metrics (likes, shares, comments), and customer retention rates help understand engagement.

Brand Loyalty assesses how likely customers are to continue purchasing from the brand. It reflects long-term customer retention and brand advocacy. The specific measurements for this metric are customer retention rates and repeat purchase metrics.

Share of Voice. It compares a brand's visibility and presence in the market to competitors, helping to understand a brand's market position relative to competitors. Measurement includes social media mentions, media coverage, and market share analysis.

Brand Equity represents the value of the brand based on consumer perception and loyalty. It affects pricing power, customer retention, and overall brand strength. Financial metrics like revenue growth, customer lifetime value, and brand valuation studies helpmeasure brand equity.

Key Brand Marketing Channels

Content Marketing. Valuable content (blog posts, videos, podcasts) helps attract and retain a clearly defined audience. It builds trust, establishes authority, and drives long-term engagement.

Social Media Marketing uses platforms like Facebook, Instagram, and LinkedIn to promote brands and engage with audiences.

SEO (Search Engine Optimization). Brands optimize websites\landing page content to rank higher in search engine results, improving visibility and organic traffic.

AI Search Optimization (AISO) is a brand new but very perspective tool. Understanding how AI interprets and prioritizes information helps create content that will be more visible to AI algorithms and shown in AI search results (in tools like Perplexity or chat GPT) more often.

Email Marketing communicates directly with subscribers through personalized emails, fostering loyalty and encouraging conversions. It offers a direct line to customers, enabling targeted promotions and nurturing.

Linear TV. National TV ads provide broad reach and help to find audiences that can't be reached on other channels.

Traditional TV Role in Brand Marketing

Linear TV provides an unparalleled ability to reach a large, diverse audience simultaneously, making it perfect for brand awareness campaigns. It also helps to reach older audiences (55+, 65+, and older) who may find it harder to get through digital channels and even streaming TV. And today, Linear could be data-driven, the same as streaming. Traditional TV allows for longer ad formats, enabling brands to tell compelling stories and create emotional connections with viewers. Live events still attract a number of viewers, and engagement during these events is really high; it is expensive but allows companies to build brand awareness and credibility. Combining linear TV with digital channels like streaming, social media ads, and others can create a cohesive strategy that balances broad reach with targeted precision.

Brand Marketing vs Performance Marketing

Marketing strategies often prioritize either brand or performance marketing, but the most effective approach combines both. While performance marketing focuses on immediate, measurable outcomes, it can become unsustainable without a strong brand foundation. A strategy centered only on performance may generate quick conversions but lacks the long-term impact needed to build recognition and trust. On the other hand, brand marketing establishes credibility and emotional connection but does not always deliver immediate returns. The key to success is striking the right balance, an approach known in TV advertising as Brandformance TV. Performance marketing relies on metrics such as cost per acquisition (CPA), return on ad spend (ROAS), and conversion rates to measure effectiveness. Showing measurable results is essential for channels such as paid search, SMM, and streaming TV. However, without brand awareness, performance-driven efforts often lead to higher acquisition costs and lower conversion rates. Customers who are not familiar with a brand are less likely to engage, and repetitive transactional messaging without deeper brand reinforcement can lead to diminishing returns. Brand marketing, on the other hand, builds familiarity and long-term engagement. A balanced strategy leverages both strengths. By applying Brandformance TV, advertisers achieve the necessary balance to drive immediate results while strengthening brand equity for the future.